Ether's Surge Fuels Speculation of "Altseason" While Analysts Call for Caution
Summary:
As Ether edges towards the $3,000 mark, experts argue about the likelihood of an "altseason." While Apollo Capital's CIO, Henrik Andersson, and others predict an impending altcoin rally, Markus Thielen from 10x Research urges caution, pointing to Bitcoin's enduring dominance. The market's momentum, according to Thielen, seems more influenced by potential ETF approvals than increased activity within dApps. He expects the current bull market to last till 2025, with altcoins making various rally attempts. Meanwhile, blockchain analytics firm Santiment has signaled overbought warnings, suggesting higher than average market risks during a 4+ month surge.
There is a growing buzz around the possibility of an "altseason" as Ether (ETH) edges towards the $3,000 mark. However, experts warn its arrival may not be imminent. On February 19, Ether achieved a 22-month and daily high of $2,980, a height unseen since April 2022. Such trends have led many to predict an impending "ETH bull market", while others have proclaimed the return of "altseason" to the crypto sphere. Echoing these sentiments, Apollo Capital's Chief Investment Officer Henrik Andersson hinted at several impactful catalysts poised to fuel an altcoin rally. He referred to key Ethereum features like the Dencun upgrade, as well as the Blast scaling solution and the EigenLayer restaking platform going live. Andersson added, "Given Ethereum's subpar performance compared to BTC over the past year, it appears due for a rebound, especially considering supply sinks and its deflationary nature since transitioning to PoS." Levine Adler, an engineering director at Coinbase, and Mikybull Crypto, an economist and trader, also predicted an ETH bull market, hinting at a potential surge of altcoins. Moreover, Titan of Crypto, a technical analyst, presented a chart where the total market capitalization of altcoins, excluding BTC and ETH, showed a breakout.
However, Markus Thielen, head of 10x Research, cautioned against prematurely assuming an altcoin season. Thielen explained that although there's ongoing speculation about an altcoin season, substantial evidence is lacking, with Bitcoin's dominance maintaining at 51%. For a realistic altcoin season to commence, he asserts we need to see Bitcoin's dominance decline below 45%. Amid the absence of compelling narratives that characterized previous market surges, Bitcoin ETF investments are the only notable upswing trend currently. Additionally, recent altcoin rallies have rapidly dissipated, indicating Bitcoin investments may offer a safer strategy. Furthermore, Thielen suggested that Ethereum's momentum seems more influenced by potential ETF approvals in May rather than increased activity within dApps. He anticipates this bull market to persist till 2025, with altcoins likely attempting various rallies during this period.
On February 20, blockchain analytics firm Santiment reported that a significant majority of cryptocurrency projects have generated profits for the average wallet on a mid to long-term basis since market movements began in October, except for a few lagging altcoins. Nonetheless, the firm flagged overbought indicators, attributed to the market value to realized value (MVRV) metric which signals a higher risk than average in buying or initiating new positions during a 4+ month surge. MVRV is the ratio of the total market cap divided by the realized cap and is utilized for identifying local market peaks and troughs.
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Published At
2/20/2024 9:20:25 AM
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